Perfecting management accounting with performance evaluation at listed oil and gas enterprise in vietnam

Overview of related research topics It can be said that domestic and international studies have confirmed the importance of management accounting and evaluated the operational efficienc

ACADEMY OF FINANCE

LE THI MINH TRI

PERFECTING MANAGEMENT ACCOUNTING WITH PERFORMANCE EVALUATION AT LISTED OIL AND GAS

ENTERPRISE IN VIETNAM

Major : Accounting Code : 9.34.03.01

SUMMARY OF THE DOTORAL THESIS OF ECONOMICS

HA NOI - 2021

The Project is Completed

at the Academy of Finance

Supervisors: 1 Assoc Prof Dr Tran Van Hoi

2 Dr Nguyen Tuan Anh

Reviewer 1:

Reviewer 2:

Reviewer 3:

The thesis will be defensed at the Academy-level Evaluation Council, met at the Academy of Finance At of date month year 20

The thesis may be searched at the National Library

and the Academy of Finance Library

INTRODUCTION

1 The urgency of the subject

In the context of the complicated situation of the Covid-19 epidemic in many countries around the world since the beginning of the year, causing many global manufacturing industries to fall into a difficult situation, transportation activities have stalled, the world oil price fell sharply for a long time, putting Vietnam's oil and gas industry in front of unprecedented challenges in the history of development

Performance evaluation occupies an important position in the production and business activities of enterprises It is an effective management tool that businesses have used for a long time Performance evaluation helps businesses self-assess and evaluate the implementation of economic and financial targets, how far are the results achieved, thereby offering solutions to make the most of the world enterprise strength

In the process of running the business, the managers must exchange and update accounting information The managers after making a complete and reasonable plan, the organization implementing the plan requires checking and evaluating its implementation The commonly used method is to compare the planned or estimated data with the implementation data, thereby identifying the deviations between the achieved results and the set goals To do this, managers need to be provided with performance reports, which act as a feedback step to help them identify issues that need to be adjusted Furthermore, to evaluate the performance of the remaining managers requires accounting information to be complete, timely and accurate to well perform its administrative functions and activities Thus, management accounting has a leading role and governs all business activities of enterprises Based on the information provided by the management accountant, the managers make appropriate business decisions in the short and long term to ensure the existence and sustainable development of enterprises in the market economy

In fact, at listed oil and gas enterprises in Vietnam, management accounting for management in general and performance evaluation in particular still has many shortcomings that need to be improved First of all, the awareness of managers about the role of management accounting as well as the relationship between management accounting and performance evaluation is

not satisfied, management accounting is still overlooked On the other hand, the system of indicators used to evaluate the operational efficiency provided by the management accountant does not accurately reflect the actual performance of the unit Besides, the method used to evaluate the performance a mainly simple comparison Stemming from the above reasons, the author has chosen the topic

"Perfecting management accounting with performance evaluation at listed oil and gas enterprise in Vietnam" for his doctoral thesis

2 Overview of related research topics

It can be said that domestic and international studies have confirmed the importance of management accounting and evaluated the operational efficiency and role of management accounting in providing information to business managers The study of the relationship between management accounting and performance evaluation is growing day by day, has been, and will be in-depth for each specific industry However, the published studies have not had any in-depth research on management accounting with the evaluation of performance

at listed oil and gas enterprises in Vietnam, while The oil and gas industry is a growing industry that needs management accounting to provide necessary information for the management of production and business activities of enterprises There has not been any research that solves the relationship of management accounting with the evaluation of performance in a comprehensive way so that the most practical solutions can be given blank that the author will focus on perfecting

3 Objectives of the study

- General objective: Proposing appropriate solutions to improve management

accounting with the evaluation of operational efficiency at listed oil and gas enterprises in Vietnam

+ Specify the basis for proposing solutions to improve management accounting with the evaluation of performance at listed oil and gas enterprises

in Vietnam

4 Research question of the thesis

General question: What are the appropriate solutions to improve management accounting with performance evaluation at listed oil and gas enterprises in Vietnam?

From there, the thesis must answer the following specific questions:

- What are the manifestations of the relationship between management accounting and performance evaluation?

- What is the current status of the relationship between management accounting and performance evaluation at listed oil and gas enterprises in Vietnam today?

- On what basis is the proposal of solutions to improve management accounting with the evaluation of performance at listed oil and gas enterprises

+ In terms of space: The thesis focuses on studying oil and gas businesses listed in Vietnam

+ In terms of time: Research from 2017 to 2021

6 Research method of the topic

Based on the method of dialectical materialism, historical materialism, to have scientifically grounded analysis and evaluation The topic uses research methods: Synthetic method; Comparative method; Analytical methods… Besides, the thesis applies a descriptive using SPSS to assess the current status

of the relationship between management accounting and performance evaluation in listed oil and gas enterprises listed in Vietnam

7 New contributions of the thesis

Theoretical, The thesis outlines the theoretical basis of the relationship between management accounting and the evaluation of performance in enterprises and is particularly interested in the assessment of content: management accounting with the evaluation of the efficiency of using inputs management accounting with the evaluation of cost-effectiveness management accounting with the evaluation of business results, management accounting with the evaluation of efficiency debt use, management accounting with the evaluation of financial investment performance, management accounting with the evaluation of profitability, management accounting with the evaluation of social performance The theoretical part is the foundation for a good approach

to the selected survey unit

In practice, The thesis explores and studies the history of formation, organization of business management apparatus and decentralization of financial management, characteristics of accounting apparatus, characteristics

of oil and gas business activities affects the relationship between management accounting and the evaluation of management accounting performance of listed oil and gas enterprises in Vietnam The thesis properly assesses the current situation of the relationship between management accounting and the performance evaluation of 23 listed oil and gas enterprises in Vietnam Assess the advantages and limitations of management accounting with the evaluation

of performance in listed oil and gas enterprises in Vietnam The thesis has presented the orientations, requirements and solutions to improve management accounting with the evaluation of performance in listed oil and gas enterprises

in Vietnam These solutions can be applied depending on the characteristics of production and business activities of enterprises

8 Structure of the topic

In addition to the introduction, conclusion, table of contents, list of tables, figures, appendices and list of references, the thesis is structured into 3 chapters:

Chapter 1: Theoretical basis of management accounting with an evaluation

of performance in enterprises

Chapter 2: Current status of management accounting with the evaluation

of performance at listed oil and gas enterprises in Vietnam

Chapter 3: Principles and solutions to perfect management accounting

with performance evaluation at listed oil and gas enterprises in Vietnam

Chapter 1 THEORETICAL BASIS OF MANAGEMENT ACCOUNTING WITH ASSESSMENT OF OPERATION EFFICIENCY IN ENTERPRISES

1.1 OVERVIEW OF MANAGEMENT ACCOUNTING IN THE BUSINESS

1.1.1 Management accounting and its role

“Management accounting is an integral part of the accounting system, which is set up to provide information to help managers in the enterprise management and control the organization's activities to achieve the common goals of the enterprise promptly the most effective"

Today's management accountants have the following specific roles: Provide necessary information to help business managers as a basis for planning, organizing and operating, checking and monitoring the implementation of objectives estimate; It is an effective tool to support managers in determining the direction and controlling the entire operation of the enterprise; Motivate managers and employees to achieve the goals of the enterprise; Calculating and measuring the effectiveness of activities, units, managers and employees in the enterprise; Compare the competitiveness of enterprises in the market, ensure the long-term competitiveness of enterprises in the industry; Planning and controlling the process of implementing the plan to create sustainable development for the business

1.1.2 Functions of management accounting

For management accounting to affirm its role in management and administration, management accounting must perform well the functions of

implementation of plans and making decisions With the management function

in the enterprise, the management process is carried out according to the following steps:

- Provide information for the planning process

- Provide information for the implementation process

- Provide information for the inspection and evaluation process

- Provide information for the decision-making process

1.1.3 Fundamentals of management accounting

- If considering the content of the information provided by the management accounting, it is possible to generalize the management accounting

of enterprises including: Accounting for production and business factors

(including fixed assets, labor, wages); Management accounting of costs and product prices; Management accounting of revenue and business results; Management accounting on financial investment activities; Management accounting of other activities of the enterprise

- If considering the process of management accounting to the management function, management accounting includes the following stages: Formalizing the goals of the enterprise into economic indicators; Preparation of general and detailed estimates; Collect and provide information on the results of the implementation of the objectives; Prepare management accounting reports

1.2 OPERATION EFFICIENCY AND ASSESSMENT OF OPERATIONAL EFFICIENCY IN THE BUSINESS

1.2.1 Operational efficiency

From the nature of operational efficiency and the above analysis and evaluation, according to the author: "Operating efficiency is an economic category expressed through a system of specific economic indicators built based

on economic indicators based on the relationship between outputs and inputs, thereby reflecting the level of use of resources of the enterprise and business activities so that the waste of resources and resources is the lowest with the benefit of the enterprise yield is highest in terms of a harmonious combination between economic efficiency and social efficiency”

1.2.2 Evaluating performance

Performance evaluation is a comparison between the costs spent and the useful results obtained to achieve that result Useful outcomes can be understood to include social efficiency and economic efficiency

Or performance evaluation is also understood as the measurement of the performance of an enterprise through a system of economic and financial indicators Research by Hult et al (2008) has shown that there are 3 criteria to measure operational efficiency, which are business performance measurement, financial performance measurement, and aggregate efficiency measurement

1.2.3 Indicators of performance evaluation

To acurately assess, and have a scientific basis for, the performance of an enterprise, it is necessary to build a complete system of indicators that both reflect the basic elements of the business process To ensure the above requirements, usually use the following criteria:

Performance = Outputs/Resource (cost) input

1.3 RELATIONSHIP BETWEEN MANAGEMENT ACCOUNTING AND OPERATION EFFICIENCY ASSESSMENT IN THE ENTERPRISE

1.3.1 The relationship between management accounting and the evaluation of the effectiveness of using input factors

Input factors include: raw materials, input goods; fixed asset elements; labor factors Supply of inputs is the first important activity of production and business activities When evaluating the efficiency of using these factors, it is necessary to focus on assessing the characteristics of each group of input materials and goods; fixed assets; labor

Elements of raw materials and goods: include main raw materials, auxiliary materials, fuels, serving the production process of products or goods for commercial enterprises If enterprises do well in the supply and storage of raw materials, it will create favorable conditions for the production process to

be carried out continuously, contributing to improving business results and efficiency On the contrary, if the process of purchasing and storing is not good,

it will affect the production and consumption process, causing a waste of resources of the enterprise

Elements of fixed assets: Fixed assets (fixed assets) are the main labor materials of great value and long-term use in the enterprise, in accordance with current accounting standards receive fixed assets Therefore, how to use fixed assets to exploit the full capacity of fixed assets invested in to improve profits is

a matter of concern for all management levels in the enterprise Management accounting provides information and advice to managers about the investment process, fixed assets to be invested, information about the status of operation; use, new and old condition, fixed assets to be used or used ineffective to come

up with a plan for liquidation and sale

Labor factor: Assessing the efficiency of used for rational and effective use of labor, saving labor, while ensuring the lowest costs and the highest income of employees that is the ultimate goal of managers in a competitive and developed market mechanism To provide information for managers to evaluate performance, management accounting needs to provide the following information: information on the number of employees, labor structure (gender, age, professional qualifications), labor productivity, working time (working days, working hours)

1.3.2 The relationship between management accounting and cost effectiveness assessment

- Direct material cost factor: Direct material cost includes: cost of main materials, cost of auxiliary materials, cost of fuel directly involved in the

production of products of the company enterprise This is a cost that usually accounts for a large proportion of the cost of manufactured products Therefore, evaluating the efficiency of using direct material costs aims to identify the factors that directly affect the cost of raw materials, untapped potentials, economical or wasteful use, high or low efficiency to reduce direct material costs and lower product costs

- Factor of direct labor costs: Direct labor costs of enterprises include: main salaries, supplementary amounts, deductions according to salary according to the prescribed rate, etc of workers directly engaged in production and business

To evaluate the effectiveness of direct labor costs, managers need information on wage costs and the number of employees Management accounting provides information on the average number of planned and actual employees, actual salary costs, and planned salary costs At the same time, management accounting uses the comparison method between the actual and the planned number of employees in each department, the average salary of each department

- Elements of selling and administrative expenses: Selling expenses are expenses incurred to serve the consumption of products, goods and services of enterprises Selling expenses include many factors such as: Cost of sales staff, materials and tools for sales, costs of external services, costs of advertising, marketing, product warranty

Evaluating the effectiveness of using selling and administrative expenses

to use them effectively, economically, and to the right audience, avoiding wasteful costs to help improve business efficiency To provide information for managers to evaluate the effectiveness of cost use, management accounting provides targets and compares the actual and planned costs of wages paid to sales staff, management staff ; materials and tools for sales and business management; outsourced service costs, advertising and marketing costs, product warranties, fixed asset depreciation expenses

1.3.3 The relationship between management accounting and business performance evaluation

The Business results of an enterprise, also known as net profit from business activities of an enterprise, is the difference between outputs and inputs

of production and business activities Business administrators need accountants

to provide full information on profit and loss results (profit before tax, profit after tax), information on costs (cost of goods sold, administrative expenses of

the business), selling expenses) of each line of business, each type of product, each service To satisfy these requirements, it is necessary to organize management accounting of business results Based on the above information, management accounting compares the actual and the planned revenue, profit and loss results (profit before tax, profit after tax), cost of goods sold, and administrative expenses, cost of sales of each type of product, each service to evaluate operational efficiency

1.3.4 The relationship between management accounting and the evaluation of debt efficiency

To improve the efficiency of using receivables, enterprises must take measures to speed up the collection of receivables (the number of debt collection increases, the time for debt collection decreases) To achieve the above goal, management accounting needs to provide information to help managers quickly recover debts By basing on the actual debt collection of each enterprise compared to the payment term (compared to the previous year, the previous period, compared to competitors) In accounts’ payable, payable to suppliers is often important to the solvency and reputation of a business The purpose of assessing the efficiency of using liabilities is to improve the efficiency of capital use of the enterprise To achieve this goal, management accounting needs to provide information on the structure of liabilities, information on suppliers, types of debt by term, payment term and quality of debt, and reputation of the enterprise compared to suppliers…

1.3.5 The relationship between management accounting and the evaluation of financial investment performance

To managers to evaluate investment performance, management accounting provides the following information: investments (detailed by object, term, investment nature); dividends, profits are distributed in proportion to the investments The evaluation is usually conducted by comparing the actual and planned results of the stock investment (comparing with other enterprises in the same industry, the financial indicators are publicized on the stock market to see the results) real business performance of enterprises), real estate investment results (compare the value of each type of real estate between this period with the previous period or the implementation period against the planning period so that scale and growth rate, thereby seeing the influence of factors on the scale and efficiency of real estate investment), capital contribution investment results (based on investment price and distributed profit), other investment results (loan object, loan term )

1.3.6 The relationship between management accounting and profitability assessment

Profitability represents the ability to make a profit from input resources, input or output costs reflect the production results of the business The of a business reflects the ability of the enterprise to use the available resources to achieve the highest results in the business Evaluating profitability aims to use resources effectively to improve work productivity and speed up the asset turnover of the enterprise To assess profitability, management accounting provides information related to gross profit margin, net profit margin of each division, product, region, and market; the ratio of selling expenses, administrative expenses to revenue

1.3.7 The relationship between management accounting and social performance assessment

Social efficiency is a category that reflects the level of use of production resources to achieve certain social goals The social goals are usually job creation, infrastructure construction, improvement of social welfare, the of living and cultural and spiritual life for workers, assurance and improvement of people's health labor, improve working conditions, ensure environmental sanitation, The determination of the level of contribution to society can be based on the level of job creation for workers (based on the total amount of labor) salary, number of employees employed, labor productivity and average income of employees); the level of contributions to the state budget (paid taxes, fees, and items that pay the most taxes to the state budget); contribution to society in terms of community and local development funds

1.4 EXPERIENCE APPLICATION OF MANAGEMENT ACCOUNTING WITH ASSESSMENT OF OPERATION EFFICIENCY OF SOME COUNTRIES IN THE WORLD

1.4.1 Experience in applying management accounting to the performance evaluation of US

1.4.2 Experience in applying management accounting to the performance evaluation of France

1.4.3 Experience in applying management accounting to the performance evaluation of Japan

1.4.4 Lessons on applying management accounting to the evaluation

of performance in Vietnamese enterprises

CONCLUSION CHAPTER 1

In this chapter, the author presents the content of management accounting, operational efficiency and performance evaluation, the relationship between management accounting and performance evaluation Management accounting plays the leading role and controls all production and business activities of enterprises The information that management accounting provides helps business managers make appropriate business decisions Evaluating operational efficiency is an important content in analyzing business performance, helping information users have an overview and complete overview of the business's operational capacity, profitability and potential have been

Chapter 2 THE STATUS OF MANAGEMENT ACCOUNTING WITH

ASSESSMENT OPERATION EFFICIENCY AT LISTED OIL AND GAS

BUSINESS ENTERPRISE IN VIETNAM

2.1 OVERVIEW OF LISTED OIL AND GAS BUSINESS ENTERPRISE

IN VIETNAM

2.1.1 History of formation and development

Vietnam's oil and gas industry is dominated by the Vietnam National Oil and Gas Group (PetroVietnam), under the supervision of the Ministry of Industry and Trade, in both management and operation in this industry All domestic oil and gas production is carried out by PetroVietnam's upstream subsidiaries, the Vietnam Gas Exploration and Production Corporation (PVEP)

or through joint ventures (JV) and distribution contracts product division (PSC), in which the national oil company holds at least 20% of the shares PetroVietnam's production and business activities include: Oil and gas prospecting and exploration, Oil extraction, Refining, petrochemical and other biological products production, and Exploitation and gas supply

Thus, as of December 31, 2020, there are more than 25 oil and gas enterprises listed on Vietnam's stock market However, among these 25 companies, some companies have just been listed as of May 2019 such as DMC

- Northern Petrochemicals Joint Stock Company (PCN), so information about the This is not enough for the period from 2014 to 2018 or there are companies that have been listed for a long time, but their financial situation and business results are abnormal, so the author did not select the research sample